Pay off CC every month but still show a high balance.

[Anonymous]

Hi My name is Joe and I am new here.

I have a question about showing a high credit card balance. I pay off my credit cards and all other accounts every month. In fact I don't carry any debt except what accumulates during the 30 days. When the bills come in I pay them in full.

But my FICO score is hurt by the fact that I show high balances. I think this is because I run up about $4,000 every month in new CC debt and then pay it all off at the end of the month.

Personally, I don't look at this as debt. But for some reason it is hurting my score. For me, it is just easier to use the credit cards for purchases and only write 1 check at the end of the billing period.

My FICO score is only 740. This seems kind of low for someone who pays off everything every month, Has never missed a payment on anything, and has nothing negative on my credit report. I don't even have a mortgage or a car payment. I paid cash for both. Does anyone have any Ideas?

Message Edited by Joethemechanic on 12-15-2007 05:47 AM

Message Edited by Joethemechanic on 12-15-2007 05:49 AM

[Anonymous]

You have a very good FICO, congrats.

If you want a score boost from your CC usage, pay the balances before the statement cuts or determine the date your CCC reports to the CRAs and pay them down just before that date. To score higher, your utilization of CL should be under 10%. For example, if you have $20k total CL the balances reported should be under $2k. This is per account & per total accounts.

A mtg and/or car loan would actually help the FICO, as they would add to your mix of accounts.

I know it all sounds a bit ridiculous, but if you want higher scores that's how the game is played.

Really tho, you are fine with a 740, no need to do anything. 

Message Edited by Anderson on 12-15-2007 09:02 AM

[coachhenson]

Anderson is right.

Find out the day your cards report to your CRA's.  It is usually when your cycle ends on your bill and it differs for EVERY card you have unless you can get every card to change billing dates.

I just figured this out, too, and am expepcting a 60-100 point difference this month as soon as my Hooters card reports the balance paid with my reports.

[haulingthescoreup]

Once you know the dates, you'll get even better results if almost all cards show as PIF'd (paid in full), and only one or two cards show a balance of under 10% of those cards' credit limits.

It's going to be more challenging if you pay by mailed checks, so you also might consider paying on each card's website (that way, it's usually credited that very day.) Some take an absurdly long time to get set up, like my Citi/ Sears card, and others take about 2 minutes.

A lot of people feel that paying online is unsafe, but if you are actually on that company's site, and you see the https (instead of just http) on their URL, you should be OK. It is really less secure to mail a check these days, not to mention all the different ways that your payment can fail to get there and be posted.

[coachhenson]

Paying online is the only way to go.  It's there.  It posts within a day unless you choose a different day (I don't think I am smart enough to schedule a payment a week early...).

I would recommend this to anyone. 

I write checks for one thing only write now.  My mortgage and that is only because it is in an owner-finance situation and I am about to get out of that situation.  After that, paperless unless I need a check.

This board has practically saved my financial life faster than any debt counselor ever could.  I have saved a fortune doing it all myself.  My wife and I did our bankruptcy ourselves in 2005 and if we had known about this site then, we would have already been out of the woods financially.

God bless all of you and good luck!!!